Real estate has always been a lucrative sector for generating passive income. The IBEF-Indian Brand Equity foundation states that “by 2030, the real estate sector is expected to reach US$ 1 Trillion in market size”, making it the apple-eye for investors. On that account, the real estate market has always been a promising sector for both investors and asset holders.

Hence, with the increase of property owners and investors in this sector, lease portfolios have also increased plentifully.

The lease management process defines systematically optimizing a lease portfolio to provide transparent control to the landlords over their property. It includes various procedures like tracking and accounting for the leases and subleases, maintaining the invoices and bills related to the properties, and keeping up with the transforming lease regulations.

Traditionally lease administration was done by maintaining a lot of paper documentation. Landlords had poor control over the leases, with inadequate accounting. Negotiations on the lease terms were minimal, leading to strained compliance between the leaseholders. Hence with the use of technologies, the administration has evolved significantly.

Managing a Lease portfolio is becoming increasingly arduous with the ever-changing market. The fluctuating market prices and the convolute lease portfolios pose many adversities. However, a centralized administration using highly collaborative software to manage the lease portfolio could help reduce the complexities involved.

The tasks involved in the lease management:

The lease administration process comprises countless tasks.Legal terms and agreements negotiated between the lease and the lessor are then enlisted in a Lease contract. Then this contract is needed to be approved legally by the finance departments. Next comes the lease abstraction, where the vital aspects of the lease are taken and converted into a readable format for the benefit of the stakeholders. A streamlined process is required to monitor rent overpayments, verify taxes on the lease agreements, keep track of the market, update the lease portfolio on any amendments made and notify the stakeholders on renewals and terminations of a lease. Data analyzed to forecast the future of the properties owned also helps the landlords to be in control.

In any property's income statement, the loss-to-lease is a significant line item, which indicates the efficiency of lease management. Loss to lease gives the difference between the market rent and the actual rent value. The loss-to-lease displays the potential revenue the landlord is missing on. When the lease portfolio deals with several assets, this figure may also be in millions of rupees.

A lease portfolio with a maximum difference in the loss to lease indicates that it is not managed well and is not up-to-date with the market. Hence keeping an eye on the market and minimizing this difference is also required in lease management.

Some of the Challenges faced in lease administration:

● The real estate market value keeps fluctuating. They increase or decrease faster than the lease period. Hence the lease terms wouldn't be able to cope with the volatile nature of the market.

● The administration process could be time-consuming. Without a well-ordered approach, the process would be overwhelming and tedious.

● Landlords of the shopping malls and complexes have to handle the co-tenancy clause. The clause, negotiated when the prime tenants move out of the retail space, favours the other tenants as they could reduce the rent paid. Hence, obtaining compliance on the clause between the stakeholders might get a little serious.

● The shifting trends due to the pandemic have led to the downfall of many landowners. Thus proper lease administration is required to ride the tide.

● A copious amount of data acquired from the several assets listed in the portfolio is to be simplified to extract the relevant points. These points could potentially help in making improvements to the properties.

Solutions that overcome the challenges:

The real estate market changes are handled by drawing up malleable leases based on a specified consumer price index(CPI). Consumer Price Index refers to the range of increase and decrease of market rent based on regional or national inflation. Hence on negotiation, the lease contracts can be altered annually based on average market rates. Consequently, this could help in minimizing the loss to lease value.

A comprehensive system that helps with administrative tasks and organizes the data into a manageable form is essential for dealing with the challenges.

The Lease Portfolio 365 is highly integrative cloud software that handles all kinds of Lease portfolios with utmost precision. It consists of AI tools that perform data analytics to offer insights that resolve growth strategies. The analyzed data obtained could be used for negotiating, reporting, and documenting purposes.

What could Lease Portfolio 365 do for you?

Lease Portfolio 365, when integrated with your lease management, could deliver substantial assistance. Here are a few ways how LP365 can be of use to you:

● Lease Portfolio 365 helps with lease abstraction, data setup, and migration.

● It provides timely notifications on expiration dates of lease agreements.

● It automates almost every task, providing sheer transparency to the administration.

● Documentation associated with the properties is maintained in the cloud and is easily accessible.

● With the help of geocoding, it can effortlessly lay out the location of every property enlisted.

FREQUENTLY ASKED QUESTIONS

1) How is Lease Portfolio 365 better than Excel?

With an easy-to-use User Interface, Lease portfolio 365 makes administration tasks simple. It is easy to avail the data from anywhere with any device as it is cloud-based. Moreover, as it is created solely for lease management, it provides a cutting edge in comparison with excel. It automates tasks like report generation and data integration. Using SSL encryption scrambles, the Lease Portfolio 365 offers secure protection to your data.

2) Is Lease Portfolio 365 integrable with the existing administration system?

Yes, Lease portfolio 365 can be integrated with any environment. Incorporating LP365 with the existing enterprise resource planning software makes it easier to adapt to the current workflow. It gives the benefit of creating unlimited user accounts to enhance team productivity. It provides data backup with cloud-based solutions, automates the accounting process, and helps with much more administrative tasks.